Stocks on Wall Street closed lower Tuesday as investors brace for a big week of news on inflation and company earnings reports. The S&P 500 fell 35.63 points, or 0.9%, to 3,818.80. The Dow Jones Industrial Average fell 192.51 points, or 0.6%, to 30,981.33. The Nasdaq fell 107.87 points, or 0.9%, to 11,264.73. Big companies are beginning to report their latest quarterly results this week. PepsiCo’s profits easily beat analysts’ estimates. Major banks including JP Morgan Chase are on tap later this week. Crude oil prices fell sharply and bond yields continued flashing a warning signal about a possible recession: The yield on the 10-year Treasury slid to 2.96%, leaving it, unusually, still below the two-year Treasury yield, which fell to 3.03%.
Energy prices fell broadly, weighing on energy stocks, the AP reports. The price of US crude oil slumped 7.9%, settling at $95.84 per barrel. Travel-related companies bucked the broader market decline. United Airlines climbed 8.1%, American Airlines jumped 10% and cruise line operator Carnival rose 7.6%. Clothing company Gap fell 5% after announcing that CEO Sonia Syngal is stepping down from her role after two years on the job. As big companies release their quarterly results, investors will be focused on earnings as they try to determine just how much damage pervasive inflation is inflicting on consumers and businesses.
Expectations for second-quarter results appear subdued. Analysts are forecasting 5.1% growth for companies across the S&P 500, which would be the weakest since the end of 2020, according to FactSet. "We’ll get more color in the next couple of weeks about how the economy is shaping up, through the lens of companies," says Terry Sandven, chief equity strategist at US Bank Wealth Management. Soft drink and snack maker PepsiCo slipped 0.6% Tuesday after releasing a profit report that easily beat analysts’ estimates. Delta Air Lines will report its latest results on Wednesday and provide more insight into the travel industry's recovery from the pandemic.
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